Why this may just be a marketing ploy
It is quite possible that your broker or financial advisor has an impressive-sounding title that indicates expertise managing the accounts of older investors – something like Senior Specialist. This, in fact, could be one of the reasons why you chose him or her to manage your investments. But what you may not know is that the title might not really mean anything.
When a securities professional has a special designation, he or she may have earned it through training or by passing certain tests. However, it is important to understand that there may not have been any requirement to get it. And when it comes to designations involving seniors, the SEC, FINRA, and state regulators don’t endorse them.
Why are title designations used?
In some cases, financial professionals have specialized knowledge that can help senior investors. But in many cases, they are simply used as a way to attract older clients, with the title being little more than a marketing tactic.
A widespread problem
In 2011, FINRA issued its Regulatory Notice 11-52 in an attempt to crack down on these designations. A survey conducted by the agency showed how lax firms were when it came to senior designations. Only 66 percent of the firms surveyed that permit the use of senior designations required approval and verified the necessary credentials. Twenty-three percent required approval but did not look at credentials, while 11 percent did not require approval or verify credentials. This is why FINRA now offers guidelines to firms regarding these designations.
How investors can stay protected
You want to be sure that the person handling your money can be trusted, which is why it is important to do some research. One of the first places to visit is BrokerCheck, FINRA’s free tool that lets you see the complete employment history – along with all disclosures and any customer complaints – of every registered broker. If a broker has a special designation, you can learn all about it here and what is required to earn it.
Why accreditation is important
Financial professionals are not allowed to use a designation unless it has gotten accreditation from either the National Commission for Certifying Agencies or the American National Standards Institute. These are nonprofit organizations created to offer protection to the public. In order for someone to call him or herself a Certified Senior Advisor, for example, there are numerous qualifications and educational requirements.
How to stay vigilant
The best way to figure out if an advisor is right for you is to closely scrutinize them. In addition to looking into their work history, question them about their experience and expertise. Ask about the types of investments they generally recommend. Talk to them about your goals to see if they understand what you hope to accomplish. Above all, don’t agree to anything unless you are 100 percent comfortable.
Unfortunately, as many people find out, often job titles are meaningless. Just because somebody claims to be a specialist doesn’t mean they have the necessary skills or experience to help their clients. Plus, even if someone has an earned designation, they may still take advantage of their customers.
Older investors who have lost money through misrepresentation or other types of fraud have a right to attempt to recover those funds. One of the quickest and most cost-effective methods to do this is through securities arbitration. If you are a victim of elder financial fraud, the Silver Law Group might be able to get you your money back. And because we work on contingency, you won’t owe us a fee unless we are successful. To get started, give us a call at 800-975-4345 or fill out our online contact form.